Expenditure on refugees can be large stimulus to growth: Mario Draghi

Speaking at the World Economic Forum, Mario Draghi said that for Europe, "the refugees are a challenge and an opportunity".

PTI|

Updated: Jan 22, 2016, 11.08 PM IST

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DAVOS: Refugee crisis in Europe presents both challenges and opportunities, ECB President Mario Draghi today said while emphasising that expenditure in this regard could be a great stimulus for growth.

"One driver of the economy, which still hasn't deployed its effect, is the probable increasing government expenditure to cope with the refugees," the European Central Bank (ECB) President said.

Speaking at the World Economic Forum, he said that for Europe, "the refugees are a challenge and an opportunity".

"Our society will change, in which direction one can only guess," he said adding government expenditure needed to cope with this challenge could be a large stimulus to growth.

About Greece, he said the situation has improved. "The Greek government has made much progress in undertaking reforms and fiscal consolidation" although more work is required in financial sector reforms and in tackling non-performing loans, among others, he added.

According to him, speed is of the essence. "The sooner this is concluded, the sooner the Greek economy will get back to a normal situation".

Asked about the strength of the European Union and the zeal for deeper integration, Draghi said early proponents of the European project did not anticipate a linear process that would be without bumps.

"All European leaders are trying to drive their people closer to the common European interest in a way that is respectful of democracy," he noted.

In a separate session, speaking on the refugee crisis France Minister of Economy, Industry and Digital Affairs Emmanuel Macron said, "We are at a critical point and we have just a few weeks to deliver concrete European solutions."

He added, "If we enter into a non-European approach, it will kill the right European approach."

The hundreds of thousands of people fleeing the war in Ukraine into Poland is an unrecognised crisis, said Witold Waszczykowski, Minister of Foreign Affairs of Poland.

The minister said that it is important to focus on the conflict on Europe's eastern borders.